By Joe Petrowski
We saw many things at the initial Democratic presidential debates, but one thing not present was a calculator (and I mean a simple one, not some complicated scientific model). To one degree or another almost all said they supported the “Green New Deal,” which many mistakenly believe only involves everyone’s favorite punching bag—fossil fuels. Now that would be scary enough on its own, but it is a comprehensive program with more social engineering than carbon reduction. Here are some highlights from the debate covering the Green New Deal and other popular proposals:
- Eliminate all fossil fuels by 2030 and get 100% of all our energy needs from renewables. Even assuming this was achievable it would cost $6 trillion, wipe out $6 billion in exports, and remove 1.5 million people from the payrolls (many middle and entry level employees). It would also be a massive wealth transfer to Russia and Arab states.
- Build a smart grid for power that the Edison Institute estimates would cost $4 billion/year for 30 years, or $120 billion.
- Fund $8 billion per year for 30 years to retrofit every building in US for 30 years (there are 150 million buildings in US)—cost $240 billion.
- Offer a guaranteed job for everyone—cost $600 billion.
- Free college tuition for everyone—cost $300 billion.
- Free Health care for everyone—cost $30 trillion.
- Reparations for a range of communities for past grievances —cost $17-$20 trillion.
Total bill would be about $57 trillion, or 5 times annual GDP. If it’s paid half by debt, that would take our national debt from 22 trillion to 50 trillion, or four times GDP (assuming GDP does not shrink). A per capita debt at $157,000 would be the highest in the world and place us in a club with Lebanon, Congo, Portugal, Eritrea, Venezuela, Greece, Italy and Bhutan. Historically, by any metric only Germany’s Weimar Republic was in a worst financial place, and we all know how that turned out.
So when candidates instinctively embrace the such pie in the sky proposals and the crowd applauds, be afraid. Be very afraid.
Joe Petrowski has had a long career in international commodity trading, energy and retail management and public policy development. He currently serves as Director of Fuels for Yesway, where he oversees all operations of the fuels team, including pricing, procurement, and management of the firm’s fleet services program. In 2005, he was named President and CEO of Gulf Oil LP and elected to the Gulf Oil LP Board of Directors. In October of 2008, he was named CEO of the now combined Gulf Oil and Cumberland Farms, whose annual revenues exceed $11 billion and that now operates in 27 states. In September 2013, Petrowski stepped down as CEO of The Cumberland Gulf Group. He is Managing Director of Mercantor Partners, a private equity firm investing in convenience and energy distribution, and a member of the Gulf Board.